Advances in accounting.


The assumption in cost transparency in the supply chain is that firms have visibility of the products that are supposed to be offered to them for business. In the modern dispensation, information concerning products is not easily retrievable. Firms in most instances follow the supply chains even to the fourth tiers just seeking information about the products. Some organizations use agents in order to find the most appropriate information before committing to the costs (Koster & Delfmann 2007, p. 31). In most instances the firms fail to get the relevant products that are required to the extent that the costs are not easily verifiable. The fundamental flaws that are experienced due to information deficiency cannot ensure transparency as appropriate. Companies may not have the appropriate information based on the complexity of the product or the technology used. To this extent, transparency in cost supply chain may not be realized.

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Sharing information is a fundamental issue in supply chains. Information does not stop with demand and supply, but involves sharing sensitive and crucial details concerning the costs. Sharing of information does not guarantee that the details given are forever in safe custody. Leaking of information is an inherent phenomenon that cannot be wished away. The information that is sensitive within the framework of open-book accounting settlement is not a guarantee that the sensitive data shared among the partners are based on cooperation or trust. The mutual behavior and trust of supply-chain partners is not a factor that can be relied on for safe custody of information on products and to this extent, cost transparency in the supply chain is a fallacy. The business environment is characterized by competitiveness to the extent that trust and cooperation may not be a factor to consider when it comes relationships between buyers and suppliers (Koster & Delfmann 2007, p. 32).

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